Financial Technologies (India) Ltd. (FTIL), on Tuesday, said it has submitted to the government a Rs. 1,000 crore settlement plan, including Rs. 500 crore to be contributed by brokers, to clear the claims of small and mid-sized investors on scam-hit National Spot Exchange Ltd (NSEL).
NSEL Investors Forum, however, rejected the settlement proposal and said FTIL was “misleading the government and the investors” and the company should pay the entire dues.
The Rs. 5,6000 crore scam surfaced at FTIL’s subsidiary NSEL in August 2013 affecting 13,000 investors. The spot exchange has recovered only Rs. 371.8 crore from defaulters as on March 30 this year.
In a regulatory filing, the company said that settlement plan envisages FTIL contributing Rs. 500 crore and a similar amount by brokers to pay off investors who have lost Rs. 2 to Rs.10 lakh on the NSEL and return half the amount to those who have invested between Rs. 10 lakh and Rs. 1 crore in 3-4 weeks after completion of all formalities.
“First round of payments made to be equally by NSEL and brokers,” FTIL said, adding the company would contribute Rs. 320 crore as it has already given a bridge loan of Rs. 180 crore to NSEL earlier for clearing dues to small investors.
With the contribution of FTIL and brokers, about Rs. 820 crore would be available for immediate payment to small and mid-level investors, it added.
The pending claims of small investors is about Rs. 164 crore, while that of mid-size investors is Rs. 1,345 crore.
As per the plan, the FTIL said 779 high net worth individuals with claims of over Rs. 1 crore will also be paid 50 per cent of their dues. Public sector undertakings will be compensated with 100 per cent of their claims.
The pending claims of these investors are to the tune of Rs. 3,365 crore and this would be settled with the recovery of money from defaulters, it added.
“We believe that a resolution/settlement path is better alternative for all including brokers and trading clients of NSEL. We have proposed a solution that ensures 94 per cent trading clients’ receive between 50 and 100 per cent of their claims,” FTIL CEO and Managing Director Prashant Desai said.
